L & J Company–Sales Force Expansion

Dr. Gopal Singh Latwal

Sales and Distribution Management

MBA-III

Institute of Information Technology & Management, New Delhi

 L & J Company–Sales Force Expansion
Dr. Gopal Singh Latwal1
____________________________________________________________
ABSTRACT
The case is based on secondary sources reflecting Sale force management for L & J
Company L & J Company is leading company in plumbing and waterproofing material. The
Sales manager is facing tough challenge to manage sales force due to decline in demand in
industry. The case study explores the organisation structure of organisation and to take
decision on sales force expansion. This is just another academic exercise to put things in
perspective for the future managers so as to enable them to take appropriate measures when
faced in identical scenario.

Keywords: hiring, organisation structure, plumbing, sales force

INTRODUCTION
The Plumbing and Waterproofing Division of L & J Company limited made and sold
plumbing fixtures and fittings, waterproofing material, and adhesive. The largest of five
divisions, it operated twenty plants in India. Toward the end of the year the general sales
manager, Mr. B B. Singh, was analyzing a problem concerning an increase in the size of the
sales force. (See Figure No. 1 for Selling Section organization.)

Figure No. 1: Selling Section, Marketing Department

General Sales Manager

Manager Sales
Coordinator

Manager Sales Manager Manager

District Sales
Personnel Building Pricing
Officers
Development Coordination Supervisor

Pricing
Service Specialist

1
@ 2019 by Dr. Gopal Singh Latwal, Associate Professor, IITM. The names of organization, persons, etc has
been disguised. Any resemblance to actual persons or entities is coincidental. This case study is developed for
classroom teaching purpose only.

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The budget for the next year provided funds fifteen salespeople, and Mr. Singh compared
two alternatives: (1) hiring sales personnel with previous sales experience in the field and (2)
following the company traditional practice of hiring and training inexperienced persons.
L & J led the Plumbing and Waterproofing industry in sales; its sales of Rs. 500 million were
double those of the nearest competitor. Well known and respected, the company's market
share was estimated at 50 percent. Although its position was enviable, company management
recognized the dangers of complacency, particularly as competition stiffened and the market
share showed signs of declining.
Activity in the home-building industry, the largest market for Plumbing and Waterproofing
supplies, had fallen off. There were predictions that new housing starts in the first half of the
current year would be below the previous year's level; however, an upturn was expected.
When new housing starts dropped, total demand for plumbing and heating products also
declined; consequently, competition for available business increased. Most firms moved to
hire additional sales personnel to provide more intensive market coverage. Singh's decision
to hire fifteen additional salespeople was made for the short-term objective of reducing
excess inventory. If housing starts recovered, top management might question the value of
having fifteen extra persons, since in such circumstances L & J normally received sufficient
business to support its full productive capacity.
The company's products were of high quality and as such commanded prices about 10
percent above those of competitors. All promotion emphasized the superior product quality.
Company sales-training sessions, focusing on product information and selling techniques,
also emphasized the price-quality relationship.
L & J's sales force sold exclusively through wholesale plumbing and heating distributors.
The 250-person force called upon 1,400 wholesalers, who in turn, sold through 50,000
contractors and plumbers. Sales personnel w out of twenty-three sales offices located in some
but not all of thirteen sales districts. (See Figure No. 2, 3, and 4 for the oranizations of the
various types of typical sales districts.)

District sales managers performed administrative duties and reported directly to the general
sales manager. Their responsibilities included recruiting and training of the sales staff.
However, the general sales manager determined the number and the qualifications of those
hired.
The average salesperson wrote orders totaling from Rs. 2,400,000 to Rs. 3,600,000 annually.
Each received a straight salary of Rs. 20,000 to Rs. 50,000 per year. Sales personnel
maintained contact with distributors and assisted them in inventory control, in the training of
their sales staff, and in the use of company promotional plans, programs, and materials. Sales
personnel also promoted the use of L & J products through their contacts with home-builder
and contractor trade associations. In addition, they promoted the use of the division's
products in talks with key personnel in hospital and school administrations, public utilities,
and governmental agencies. They also inspected consumer products and made service calls.
Traditionally, L & J hired inexperienced people and put them through a six-month program.
Sales recruits spent the first three months becoming acquainted with the company's products
and policies. They then attended a formal three-month program emphasizing advanced
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product knowledge and sales techniques. Training costs amounted to approximately Rs.
2,500 per person. Once out of training, new salespersons generally became fully operational
and productive in from three to six months. (See Figure 5.)

Figure No. 2: Typical Sales District (Multiple Sales Offices) Selling Section Sales and
Marketing Department

Department

Manager Sales Personnel

Development

Sales Manager Sales Manager Showroom Operation

Supervisor Manager

Field Sales Field Sales Assistant District Pricing

Showroom Administrator
Representatives Representatives
Supervisor

District
Promotion
Showroom Representatives
Salesman
District Sales
Analyst

Order Service
Representatives

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Figure No. 3: Typical Soles District (One Soles Office): Selling Section, Sales and
Marketing Department
District Sales Manager

Sales Manager Operation Manager

Field Sales District Pricing Order Service

Representatives Administrator Representative

District Promotion
Representative

Figure No. 4: Typical Soles District (One Soles Office): Selling Section, Sales and
Marketing Department

District Sales Manager

Field Sales Operation Manager

Representative

District Pricing Order Service

Administrator Representative

District Promotion
Representative

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To lure salespeople with field experience away from competitors required starting salaries
averaging Rs.20,000 annually. Also, considerable recruiting time and effort were involved,
and there was the danger that competition might reciprocate. People with previous field
experience usually became fully operational L & J sales personnel in about one month.
Mr. Singh wanted to hire the fifteen additional people, but he was not certain whether he
should concentrate on those with or without previous selling experience in the industry.

Figure No. 5: Sales Personnel Development Unit: Selling Section, Sales and Marketing
Department

Manager Sales Personnel

Development

Supervisor Supervisor Supervisor Supervisor

Princeton Plumbing Product Personnel
Training Center Instruction Training Development
Services Services

Study Questions
1. How should Mr. Singh have gone about implementing the decision to add fifteen new
salespersons?
2. In alleviating the excess inventory situation, what other alternatives should have been
explored?
3. Evaluate the appropriateness of L & J Company’s various policies and practices
relating to sales force management.

References
1. http://www.businessenglishonline.net/wp-content/uploads/2010/10/Units-1-2.pdf
2. http://www.coimbatoreplumbing.com/img/organizational-%20FIN.pdf
3. http://www.businessstudynotes.com/marketing/marketing-management/elements-
functions-sales-force-management/
4. http://www.yourarticlelibrary.com/salesmanship/salesmen-recruitment-and-selection-
of-salesmen/48682
5. https://www.bowsmith.com/assets/salespolicy.pdf
6. https://www.mbaresearch.org/newlaps/SE_121/SE_121_st_PDF.pdf
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